Career Outlook: Mixed Signals for Engineers

Each year, Design News editors look to feedback from our exclusive salary survey for insights into how the field of design engineering is doing. After reviewing this year's results, the best way to describe the current state of things is "steady state," with salaries fairly flat and layoffs continuing to dog the profession. The good news: The bad news isn't getting any worse.

Good News, Bad News for Engineers

First, the not-so-good news: More than half the respondents—55%—had to say goodbye to some of their engineering counterparts after layoffs at their company. Only 12% of the respondents actually received a pink slip themselves. That's not a clear indicator, though, since many engineers get this magazine at their work address. Those who have left their current jobs may not have been represented in the survey.

What is clear is that the EE jobless rate hit 7% in the first quarter of 2003, compared to 4.8% for EEs in the fourth quarter of 2002, and 6% for workers overall. Figures come from the Bureau of Labor Statistics.

For the most part, companies seemed to think it was better to scale back their engineering workforce than to trim wages. Some 7% of the respondents suffered a pay cut, which is sometimes the alternative to staff reductions. However, a substantial 18% of the respondents saw no increase. Just as in last year's survey, the largest percentage—35%—got a pay bump of 2-4 %. A lucky 28% pocketed a raise of 4% or more. That's a far cry from the glory days of just a few years ago, when raises averaged 5.4% or more for engineers.

Changing jobs is one way that engineers often secure a hefty salary hike—close to 10% in previous salary surveys. But this year, a full 85% of engineers stayed put, possibly not daring to switch jobs in an economy that is only sputtering along. Another explanation: Jobs simply weren't there.

More significantly, the average engineering salary was actually lower in 2003 ($66,500) than in 2002 ($67,090). Virtually any engineer can vouch for the current problem of salary stagnation, a phenomenon that is supported by staffing specialists. "We have not experienced a great deal of change or fluctuation in engineering salaries or bonuses over the past two years," says Bruce B. Parkinson, director of salaried personnel at Delphi Delco Electronics Systems of Kokomo, IN (www.delphi.com). With most companies offering "competitive" salaries, that spells an employer's market today.

On the positive side, though, roughly a quarter of the survey respondents earned more than $80,000 last year. A fortunate 9% of them cracked the $100,000 level. However, nearly a quarter (23%) reported making less than $50,000.

The value of education also showed up in the survey, albeit with some statistical blips. Those with a master's degree earned the most on average—$81,400. Engineers who broadened their scope with an MBA reported earning less than the technologists, at $73,300. Those who went further and got a Ph.D. in engineering averaged $74,700, less than those with a MSEE, though the sample size was small. By far the largest percentage of respondents—58 %—had a bachelor's degree and a mean salary of $67,300.

Picking Up?

After a prolonged slump, there are slight signs of an upturn in the engineering community. Following several years without any special perks or salary increases, Texas Instruments paid bonuses at the close of last year and reinstituted raises this year. Smaller companies are also loosening their chokehold on the corporate purse.

"We are predicting a bonus for the first time in three years," says John D. Whitehead, an electrical services manager at RC Engineering Inc. (www.rcinc.net), a consulting company in Saginaw, MI.

Though they're generally optimistic about their career, engineers are a bit nervous about the future. That's almost a constant in fields that change as quickly as engineering. Education is always an issue as engineers ask whether new graduates are up to the task. Increasingly, rapid advancements that make it difficult to keep up while working under pressure to shorten development times are also causing concern for those looking into the future.

In recent years, immigration and outsourcing have become particular sore spots. "I do feel that there will be problems in the future if the trend continues to send manufacturing and engineering work to foreign countries," says Paul Ledoux, a Houston-based materials engineer working for a NASA subcontractor.

In yet another sign of how things can change, aerospace and defense may have partially thrown off its reputation as a field that gets hit the hardest in any downturn—at least in the minds of some engineers. "I feel that the engineering profession in my line of work is probably one of the best places to be," says Bill Katata. The Raytheon engineer cites the current focus on terrorism and homeland defense as the reasons for this marked change from the past few decades when layoffs, cutbacks, and defense were all but synonymous. "This is the first time that I can remember that a downturn in the economy hasn't ravaged the aerospace industry," he adds.

Jerry Lisewych would probably disagree. The former Boeing engineer has been pounding the pavement since losing his job in December 2001. He joined the ranks of 2,000 engineering and technical professionals laid off by the aerospace giant over the past 18 months. And more layoffs are to come, says the SPEEA, the union that represents thousands of technical and professional workers at Boeing.

Just as in 2001, most engineers are quite happy with their careers. Roughly two thirds are satisfied with their career choice, and about a quarter are even more enthusiastic, claiming to be "very satisfied." That left only 9% unhappy campers—about the same percentage as in our 2001 survey, sent out in the final days of the technical boom that lasted through most of the 1990s.

Asked what they like most about their work, "the work itself" and "technical challenges" got the nod from about two thirds of respondents. One third cited salary as the best thing about their job.

However, the high level of satisfaction is markedly different from 2002, when almost a third (31%) were unsatisfied with their career choice. It's hard to say exactly why. But chances are that in 2002, the recession surrounding many parts of the technical world was in its darkest phase, depressing engineers who realized the boom years were over.

Some observers don't feel that the current optimism is supported by positive economic events. "That's just habituation to the economy, and the concomitant hope that it's going to get better," says Nick Corcodilos, a recruiter at Asktheheadhunter.com.

He feels that the 85 % of respondents who stayed at the same job last year are doing the right thing, since seniority can help if layoffs occur. For those who have lost jobs, "It's crucial to hang out with engineers who are working,"

Corcodilos adds. They will have timely information on new jobs and can also help with recommendations.

Cautious Optimism Still the Maxim

The question of when engineering salaries will start rising again is intertwined with guesses on when job creation will replace layoffs. After two years of hearing that a recovery is six months out, caution remains the watchword in the personnel field.

Hiring managers move very slowly, making sure that each new hire is in an area where financial returns warrant expansion or justifies replacing the rare departing employee. "There are a lot more rigors in the hiring plan than in years past," says Steve Lyle, worldwide staffing director at Texas Instruments (www.ti.com).

In the overall economy, there doesn't seem to be an end to downsizing. John Challenger of the outplacement firm Challenger, Gray & Christmas (www.challengergray.com) notes that government jobless claims have been over 400,000 for 12 consecutive weeks. "That's traditionally a recessionary level," Challenger says.

The country's recession officially ended long ago, but an improvement in the job market has been elusive. Predictions that an upturn is about six months out are starting to seem like the proverbial boy crying wolf.

Many observers say that for every morsel of good news, there seems to be an equal or greater portion of bad news. "Unfortunately, there are no real signs of pickup," Challenger says. "It took 15 months for unemployment to stop going up after the end of the last recession. We're now well past that timetable since this recession was declared."

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